U.S. Department of Labor

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Administrative Review Board

200 Constitution Ave. NW

Washington, DC 20210-0001

IN THE MATTER OF:

HANNAH FURLONG-NEWBERRY,

COMPLAINANT,

ARB CASE NO. 2022-0017

ALJ CASE NO. 2019-TSC-00001

DATE: November 9, 2022

EXOTIC METALS FORMING

COMPANY, LLC,

RESPONDENT.

Appearances:

For the Complainant:

Mary Schultz, Esq.; Mary Schultz Law, P.S.; Spangle, Washington

For the Respondent:

Erik M. Laiho, Esq. and Christopher L. Hilgenfeld, Esq.; Davis Grimm

Payne & Marra; Seattle, Washington

Before HARTHILL, Chief Administrative Appeals Judge, and GODEK and

PUST, Administrative Appeal Judges

DECISION AND ORDER AFFIRMING IN PART AND

VACATING AND REMANDING IN PART

PUST, Administrative Appeals Judge:

Hannah Furlong-Newberry (Complainant) filed a complaint with the

Department of Labor’s Occupational Safety and Health Administration (OSHA) on

or about October 10, 2018. Complainant alleged that her former employer, Exotic

Metals Forming Company, LCC (Respondent)1 terminated her employment because

Exotic Metals Forming Company, LLC was acquired by Parker Hannifin

Corporation (Parker) on September 16, 2019, and is currently operated as a standalone

she engaged in activity protected by the Toxic Substance Control Act of 1986 and its

implementing regulations (TSCA).2 After a formal hearing, on December 6, 2021, an

Administrative Law Judge (ALJ) issued two orders: (1) a Decision and Order

Denying Complaint (D. & O.); and (2) an Order Closing Case and Sealing Decision

and Order (Order Sealing D. & O.). In the Order Sealing D. & O., the ALJ sealed

the D. & O. from public access, noting that it “contains and relies on ‘technical data’

within the meaning of 22 C.F.R. of 22 C.F.R. Part 120 of the International Traffic in

Arms Regulations (ITAR)” and that “[a]ttempting to adequately redact the full

(D. & O.) runs an unacceptable risk of an unauthorized disclosure.”3

On December 16, 2021, Complainant petitioned the Administrative Review Board

(Board or ARB) for review of both the D. & O. and the Order Sealing D. & O., plus a

Protective Order issued on February 12, 2020 and two related orders giving rise to

and amending the Protective Order.4 For the reasons discussed below, we affirm the

D. & O. on the merits, vacate the Order Sealing D. & O. and continue to hold in

effect the Protective Order pending our remand to the ALJ for further proceedings

consistent with decision in this matter.5

division of Parker. See Parker’s public website, accessed October 14, 2019, at Parker

Hannifin Completes Acquisition of Exotic Metals.

15 U.S.C. § 2622 and 29 C.F.R. Part 24 (2022).

Order Sealing D. & O. at 1.

Complainant’s Petition for Review identified the following additional orders as

subjects of her appeal: Order Granting in Part and Denying in Part Motion for Protective

Order and Order Modifying Protective Order and Minutes of Conference Call.

The Board recognizes that the Order Sealing D. & O. directs the parties to maintain

the terms of the D. & O. as confidential under the Protective Order. The Board is not bound

by the terms of the ALJ’s Order Sealing D. & O. See West v. Bell Helicopter Textron, Inc.,

2014 WL 12908077, at *4 n.1 (D.N.H. Sept. 30, 2014) (quoting 32 C.F.R. § 250.5(h)(4).):

[ITAR] regulations place restrictions on the export of certain

data. They do not classify that data or otherwise restrict its

public disclosures, at least by those who are not subject to the

regulations—such as this court—and, indeed, ITAR specifically

allows the disclosure of protected data ‘as may be required by

[law or] court order.

However, given the ALJ’s conclusion that his D. & O. contains information protected

by ITAR, in this Decision and Order the Board will only cite to non-technical, factual,

publicly available information in the D. & O. as necessary to transparently address the

legal issues currently before it in this matter.

BACKGROUND

During the relevant timeframe, Respondent operated two sheet metal

assembly facilities, one located in Kent, Washington, and the other in Airway

Heights, Washington.6 Complainant worked for Respondent in the Airway Heights

facility as a Senior Project Manager from May 2016 until her termination from

employment in September 2018.7 She reported to Chris Schoenwald (Schoenwald),

the Airway Heights Site Manager. Complainant received positive performance

reviews from Schoenwald.8

Complainant’s Earlier Compliance Reports

From March to August 2018, Complainant made multiple reports regarding

safety issues relating to the Maintenance Department’s work at the Airway Heights

facility, including reports about the inventory management system, mislabeled

paint, and barrel-sealing issues.9 Her May 23, 2018 report of the labeling and the

barrel-sealing issues resulted in a verbal confrontation with Gene Raczykowski

(Raczykowski), the Maintenance Department Supervisor at Airway Heights.10 Upon

being notified of the confrontation, the Director of Human Resources, Jennifer

McMasters (McMasters), directed the Human Resources Manager, John Cvitanich

(Cvitanich), to investigate the matter, which he did.11 The investigation resulted in

coaching of Raczykowski regarding productive workplace communication and no

action with respect to Complainant.12

Complainant’s Involvement in the IPP Project

Sometime in mid-2018, Respondent decided to transfer two projects, the

“IPP” project and the “APU” project,13 from its Kent facility to its Airway Heights

facility.14 The IPP project involved the transfer of Respondent’s production line,

which Respondent produced via a subcontract with another party as part of that

D. &. O. at 5.

Id. at 4-5.

Id. at 6.

Id. at 4, 6-10.

Id. at 7-8.

Id. at 8-9.

Id. at 9.

What the acronyms stood for was not disclosed in the admitted record.

D. & O. at 4.

entity’s larger Department of Defense contract.15 The parts that Respondent

produced for its contract partner were required to be coated with a specified paint.16

After deciding to transfer a project, Respondent generally creates a

communication plan describing the transfer’s rollout schedule to prevent

miscommunication amidst its employees.17 Respondent enforces the confidentiality

of its communication plans during the early phases of a project transfer to ensure

the timing and sequence of the rollout and to prevent workers’ concerns about a

project’s potential for future negative effects on the labor force.18 In Respondent’s

communication plans, the sequence of steps is more important than the exact

timing initially forecast for any specific step.19

Ernie Antin (Antin), Respondent’s Director of Manufacturing, created the

communication plans for both the IPP and APU project transfers.20 The

communication plan for the IPP project (IPP Communication Plan) consisted of an

Excel spreadsheet within which each row addressed a different step of the planned

communications roll-out.21 The phrase “KEEP CONFIDENTIAL” appeared

throughout the IPP Communication Plan at each step when additional people were

to be informed about the project transfer. The directive to “KEEP CONFIDENTIAL”

ceased to appear after the entry for September 6, 2018, at 9:30 a.m., when the IPP

project transfer was to be publicly announced.22 On August 28, 2018, Antin emailed

the IPP Communication Plan to various individuals managing the transfer rollout,

not including Complainant.23 On September 4, 2018, Antin emailed the same

individuals24 and advised them to keep the details of the IPP Communication Plan

confidential until 9:30 a.m. on Thursday September 6, 2018, the date and time

scheduled for “the broader team [to receive] communication.”25

Id. at 16-17; PX 43A.

D. & O. at 30, 36.

Id. at 10.

Id.

Id. at 7, 10.

Id at 10.

Id.

Id. at 11.

One additional person was added to the email chain; Complainant was not included.

PX 43.

D. & O. at 11.

Schoenwald decided that Complainant should be assigned to manage the IPP

project transfer.26 He did so, in part, because of her background on military projects

and her attention to detail.27

On the morning of Wednesday, September 5, 2018, Schoenwald, Antin, and

Chief Operations Officer Doug Gines (Gines) met with Complainant and Darrin

Moir (Moir), Complainant’s co-worker, at Airway Heights.28 During this meeting,

Complainant was assigned to be the project manager for the IPP project transfer,

and Moir was assigned as the project manager for the APU project transfer.29

Complainant asked what IPP stood for but no one at the meeting knew.30

Throughout the meeting, Antin, Gines, and Schoenwald repeatedly stressed that

Complainant and Moir were to keep the transfers confidential as set out in the

communication plans; Complainant nodded in acknowledgement of her

understanding of that directive.31

Complainant’s Conversations with Olsen and Others

On Thursday, September 6, 2018, at approximately 6:30 or 7:00 a.m.,

Complainant called Doug Olsen (Olsen), a Project Manager at the Kent facility

whom she knew from other projects.32 During the call, Complainant asked Olsen

what “IPP” stood for and was told he did not know.33

After his phone conversation with Complainant, Olsen went to speak to his

supervisor, Ed Schatz (Schatz), Director of Capital Assets.34 Olsen told Schatz that

he had learned about the project transfers from Complainant, and Schatz confirmed

that the transfers were occurring.35 Schatz reviewed the IPP Communication Plan

Id.

Id. at 11-12.

Id. at 11. At the hearing, Complainant testified that she had not told Olsen about

the transfers of the IPP and APU projects during the call, while Olsen testified that

Complainant did tell him about the IPP and APU project transfers during this phone

conversation. Id.

Id. at 12.

Id.

with Olsen, noting that Olsen should not have learned about the project transfer

until later that day at a scheduled meeting of the Asset Management Team.36

During the same timeframe, Complainant told Moir about her conversation

with Olsen.37 Moir told Complainant to call Olsen back and tell him to keep the

contents of the first conversation confidential.38 Within an hour of this conversation

with Complainant, Moir called Olsen himself and told Olsen that what Complainant

had told him was and should be kept confidential.39

After speaking with Moir, Complainant called Olsen a second time and asked

him to keep their first phone conservation confidential.40 Olsen agreed to do so but

did not tell her that he had already spoken to Schatz and to Moir.41

Management Learns About Complainant’s Breach of Confidentiality

Within three hours of the first call from Complainant to Olsen on September

6, 2018, Antin, Schatz, Gines, and Schoenwald engaged in multiple communications

regarding the matter. At 9:52 a.m., Schatz emailed Antin, copying Gines and

advising that Complainant had told Olsen about the IPP project transfer and that

Schatz would have preferred for Olsen to hear about it from him.42 One minute later

Gines responded, advising that he wanted to discuss the matter further and

possibly discuss it with Schoenwald, Complainant’s supervisor.43 At 10:16 a.m.,

Antin forwarded Schatz’s 9:52 a.m. email to Schoenwald asking for his thoughts on

the matter.44

Sometime before 11:43 a.m., Schoenwald approached Complainant and asked

her about her phone conversation with Olsen.45 Complainant acknowledged that

they had talked about projects but denied that she specifically told Olsen about the

Id. at 12-13.

Id. at 12.

Id.

Id. at 13.

Id.

IPP or APU project transfers.46 Complainant did not inform Schoenwald about her

second phone conversation with Olsen.47

At 11:43 a.m., Schoenwald emailed Antin stating that he had spoken to

Complainant and the situation with Olsen had been a miscommunication.48

Schoenwald stated that Complainant spoke to Olsen about projects in general but

not specific to the IPP and APU transfers.49 Schoenwald explained that

Complainant knew that the IPP project transfer was confidential until the full

execution of the IPP Communication Plan.50

Sometime after the late afternoon of September 6, 2018, and before 6:58 a.m.

on September 7, 2018, Schatz had a second conversation with Olsen.51 Olsen told

Schatz about his second phone conservation with Complainant during which she

had asked Olsen to keep their first phone conversation confidential.52

On Friday September 7, 2018, at 6:29 a.m., Complainant sent a message to

Cvitanich, Raczykowski and other IPP team members, copying Moir and Olsen,

advising them that she knew about the IPP project transfer and was planning to

travel to Kent later that month.53 At 6:40 a.m., Complainant emailed Schoenwald

and copied Moir, indicating that she had contacted other individuals to inform them

that they could share information about the transfer of the IPP project.54 Moir also

emailed the group advising that he was planning a trip to Kent for the APU

project.55 At 10:59 a.m., Schoenwald responded via email to Complainant and Moir,

telling them both that they should readjust their expectations about travel relative

to the next steps of the communication plans because he wanted to give people time

to understand how the transfer would move forward. He attached a highlighted

copy of the IPP Communication Plan.56 In his email, Schoenwald told Complainant

and Moir that he felt they were “storming the gates,” asked them to pause and

Id.

Id. at 14.

Id.

Id. at 15.

regroup on the matter and to schedule a meeting for the following Monday.57 Two

minutes later, Complainant responded by scheduling a meeting and asking if she

could move forward with making reservations for travel because the Kent

stakeholders were available the week of September 17, 2018.58

At 6:58 a.m. on September 7, 2018, Schatz emailed Schoenwald, documenting

what he had been told about Olsen’s conversations with Complainant, including

their second phone conversation and Moir’s phone call to Olsen.59 Schatz felt

confident that Olsen’s description of events was accurate because Olsen knew

specific information about the IPU and APU projects that was not public at the

time.60 At 9:30 a.m., Schoenwald emailed Schatz stating that he was unaware of

Complainant’s second phone conversation with Olsen or Moir’s phone call to Olsen,

adding, “I got this.”61 At 2:26 p.m., Schatz forwarded Schoenwald’s email to Antin

and Gines.62

Before 12:00 p.m. on September 7, 2018, Schoenwald met with Complainant

and advised her that he knew that Olsen found out about the project transfers

before the public announcement and that Olsen could not have known about them

unless he had heard the news from Complainant or someone else in Kent.63

Complainant denied speaking to anyone about the IPP project transfer until

September 7, 2018.64 Schoenwald told Complainant that her version of events was

inconsistent with what Olsen had known about the project transfers, and

Complainant reiterated that she had not told Olsen specifics about the project

transfers.65 Complainant did not tell Schoenwald about her second phone call to

Olsen.66

Id.

Id. at 14.

Id.

Id. at 15.

Id.

Id. at 15-16.

Id. at 16.

Id.

Communications About Paint Availability

On Friday, September 7, 2018, Complainant learned about a paint

availability issue relating to the IPP project.67 At 10:58 a.m., Robby Robinson

(Robinson), a member of the Kent IPP project team, emailed the minutes of the

Kent team’s weekly IPP status meeting to Complainant, which indicated that

Respondent’s paint supplier had estimated that the supply of the paint required for

the IPP project was only available through October of 2018.68 The status report also

indicated Respondent’s employees were working with their contract partner to

identify and test other paint options, and that testing was expected to be completed

within a month.69 At 1:22 p.m., Complainant forwarded Robinson’s email and status

report to Schoenwald.70 At 2:36 p.m., Complainant sent an email, copying

Schoenwald and stating that she believed the paint used on the project was being

discontinued by the manufacturer because the paint was under a state ban.71

Complainant also stated that the Kent team was working with the contract partner

to find a new source for the paint and that there would be enough paint to last

through October 2018.72

At 1:14 p.m. on Monday, September 10, 2018, Complainant emailed the IPP

team members her draft Statement of Work (SoW) for the IPP project transfer. 73 In

the SoW, Complainant listed risks associated with the IPP project transfer,

including a need to identify a new source for paint—referencing the issue that the

Kent team had already identified.74 From September 11 to September 13, 2018,

Complainant worked on a draft IPP Project Proposal, which she emailed to

Schoenwald for review on September 13.75 Complainant’s draft Project Proposal

reported that there was enough IPP project paint to last through October of 2018,

but that the paint’s manufacture was discontinued.76

Id.

Id. at 16.

Id. at 16-17.

Id.

Id. at 19.

Id. Complainant’s SoW listed “[h]aving a new source for paint” as a risk associated

with the IPP project transfer, not that the paint was banned. Id.; PX 301a.

D. & O. at 19.

Id.

Human Resources (HR) Investigation

In the context of the flurry of communications relaying different versions of

relevant facts, at 3:00 p.m. on September 6, 2018, Antin emailed Schoenwald and

Schatz, copying Gines and directing Schoenwald and Schatz to compare notes to

ensure “clarity, truthfulness, and effectiveness of communication” within the Project

Management team.77 On either September 6 or 7, 2018, Schoenwald had a phone

conversation with Antin and Gines, advising that Complainant had denied telling

Olsen that the IPP project was being transferred.78 Antin directed Schoenwald to

engage HR staff to make sure Complainant understood Schoenwald’s question.79

Schoenwald also informed Cvitanich that he had been told that Complainant had

informed Olsen of both the IPP and APU project transfers out of sequence with the

communication plans, but that Complainant had denied doing so.80

On Friday, September 7, 2018, Cvitanich facilitated an HR investigation by

looping in McMasters.81 McMasters assigned Dawn Finlayson (Finlayson), part of

Respondent’s HR staff, to interview Olsen and determine whether Complainant had

asked or told Olsen about the project transfers.82 Finlayson met with Olsen in the

early afternoon on September 7, 2018.83 Olsen relayed to Finlayson that

Complainant had mentioned the IPP and APU project transfers to him and that,

when Olsen denied knowing about the project moves, Complainant asked him

specifically about the IPP project.84 Olsen also informed Finlayson about his

conversation with Schatz, Moir’s phone call to Olsen, and Olsen’s second phone

conversation with Complainant.85

At 8:09 a.m. on Monday, September 10, 2018, Finlayson emailed Cvitanich

the typed notes from her investigative conversations with Olsen.86 At 9:04 a.m.,

Cvitanich forwarded the notes to McMasters and Antin, copied Schoenwald, and

proposed a phone conversation.87 Both McMasters and Antin forwarded the email

D. & O. at 13; PX 331.

D. & O. at 14.

Id.

Id. at 16.

Id. at 17.

Id.

chain to Gines, and Gines subsequently emailed McMasters, stating that he had

concerns he wanted to discuss with her.88

At 10:04 a.m., Cvitanich emailed himself notes he had taken of his

conversation with Schoenwald a few minutes earlier during which Schoenwald had

stated that Complainant had denied mentioning the transfer to Olsen in his first

conversation with her.89 Cvitanich wrote that during Schoenwald’s second

conversation with Complainant, on September 7, 2018, Schoenwald told her that he

had gotten more information about her communications with Olsen, that Olsen

knew about the project transfers before the announcement, and that Olsen would

not have learned about the transfers unless someone in Kent had told him about

them.90 Complainant again denied telling Olsen about the transfers.91 At 11:03

a.m., Cvitanich emailed himself his thoughts on disciplinary action against both

Complainant and Moir.92 Cvitanich believed Complainant’s employment should be

terminated because she violated confidentiality after being given specific direction

not to do so and she was not forthcoming or honest with Schoenwald about her

conversations with Olsen.93 Cvitanich also believed Moir should be given a

reprimand based on his poor judgment in telling Complainant to call Olsen back

and instruct him not to divulge the first call.94

Respondent’s Decision to Terminate Complainant’s Employment

After a senior staff meeting that ended at approximately 11:30 a.m. on

Monday, September 10, 2018, Antin, Gines, Schoenwald, Cvitanich and McMasters

met and discussed Complainant’s breach of confidentiality that occurred during her

phone calls to Olsen, Complainant’s conversations with Schoenwald, Finlayson’s

interviews with Olsen, and the question of appropriate discipline.95 They did not

discuss Complainant’s IPP project paint reports or her earlier environmental or

safety reports.96 As Complainant’s supervisor, Schoenwald was responsible for

deciding how to discipline Complainant; he recommended termination because he

Id.

Id. at 18.

Id.

no longer felt that he could rely on Complainant to be truthful.97 Antin and Gines

indicated they would support Schoenwald’s recommendation, and Cvitanich and

McMasters discussed past instances when Respondent had terminated employees

for similar acts of dishonesty.98 All those in attendance unanimously agreed that

termination was appropriate and that Respondent would move forward to terminate

Complainant’s employment.99

No one at the meeting discussed limiting or stopping Complainant’s access to

confidential information or locking her computer before the termination of her

employment.100 Respondent did not tell Complainant to stop working on the IPP

project transfer.101 Complainant was allowed to continue her work without

knowledge of her pending termination while Respondent’s HR team processed the

action and considered severance payment options.102

At the end of Complainant’s shift at approximately 2:30 p.m. on Friday,

September 14, 2018, Schoenwald asked Complainant to come to his office.103 Once

there, Schoenwald terminated Complainant’s employment.104

Subsequently, Moir took over as Project Manager of the IPP project

transfer.105 Moir submitted an updated Statement of Work for the IPP project,

which made no mention of the potential unavailability of the required paint.106

Complainant Challenges Her Termination

On or about October 10, 2018, Complainant filed two complaints with OSHA,

alleging that Respondent unlawfully retaliated against her for engaging in activity

protected under the TSCA and under Section 11(c) of the Occupational Safety and

Health Act (“OSH Act”) when it terminated her employment.107 Complainant

contends that Respondent was motivated to terminate her employment because of

Id. at 18-19.

Id. at 19.

Id.

100

Id. at 20.

101

Id.

102

Id. at 19-20.

103

Id. at 19.

104

Id.

105

Id. at 21.

106

Id.

107

Id. at 2.

Respondent’s concerns about her raising issues related to the IPP paint prior to a

scheduled Defense Contract Management Agency (DCMA) audit.108

Later, Complainant asked OSHA to terminate its investigation of her TSCA

claim so that she could pursue the claim before the Office of Administrative Law

Judges.109 On January 14, 2019, OSHA issued a final determination letter

dismissing the TSCA claim and postponing investigation of the OSH Act claim.110

Following OSHA’s dismissal of her claims of unlawful termination, Complainant

timely requested a hearing before an ALJ.111 The matter was assigned to an ALJ on

March 4, 2019112 and later set for hearing on February 18, 2020.113

Proceedings Before the ALJ

In discovery, Complainant requested information from Respondent, including

copies of work-related email correspondence sent by Complainant to supervisors

and co-workers during her final week of employment in mid-September 2018.

Respondent’s formal written discovery responses stated that no responsive

documents had been identified, though discovery was ongoing.114 Respondent later

produced redacted copies of documents related to Complainant’s communications on

November 22, 2019.115

In anticipation of the close of the discovery period on November 29, 2019,116

the parties commenced discussions regarding the entry of a protective order in

October 2019.117 The parties exchanged draft orders into December 2019 but were

unable to agree on final language related to a restriction preventing Complainant’s

108

Id. at 46-47.

109

Id. at 2.

110

Id.

111

D. & O. at 2.

112

Id.

113

Id. at 3.

114

Complainant’s Objection to Entry of Protective Order, at 4-7 (Jan 2, 2020).

Declaration of Complainant’s Counsel filed in reference to Complainant’s Objection

to Protective Order, at 3-4 (Dec. 30, 2019).

115

Furlong-Newberry v. Exotic Metals Forming Co., LLC, ALJ No. 2019-TSC-00001

(ALJ Apr. 30, 2020) (Order Amending Briefing Schedule).

116

Furlong-Newberry v. Exotic Metals Forming Co., LLC, ALJ No. 2019-TSC-00001

(ALJ Feb. 10, 2020) (Order Granting in Part and Denying in Part Motion for Protective

Order).

117

use of provided documents to file and/or prosecute future claims against

Respondent.118

In conference calls held on both December 16, and 23, 2019, Respondent

represented to the ALJ that materials withheld from discovery contained

information protected by the International Traffic in Arms Regulations (ITAR), 22

C.F.R. §§ 120-30, issued under the Arms Export Control Act, 22 U.S.C. § 2278.119

Without viewing or examining any specific information for which the protections

were claimed120 but upon motion brought by Respondent and opposed by

Complainant, the ALJ issued an Order Granting in Part and Denying in Part

Motion for Protective Order on February 10, 2020, adopting in part protective

procedures identified in Burt v. AVCO Corp.121

On February 12, 2020, the ALJ issued a Protective Order defining as

“Confidential Material” any newly produced unclassified materials and “technical

data,” within the meaning of 22 C.F.R. Part 120 of the ITAR, as well as excerpts or

compilations of Confidential Material or testimony that might reveal such.122 By its

terms, the Protective Order requires that the party designating newly produced

information as “Confidential Material” bears the burden of persuasion on any

motion challenging such designation, and that challenges are not time-barred.

Further, the Protective Order provides that no person can be provided access to

Confidential Material without signing an “End-User Agreement - Confidential U.S.

Person Acknowledgment and Agreement to be Bound” (End-User Agreement). The

ALJ ordered Respondent to produce, as soon as possible and no later than February

15, 2020, the material withheld from production in discovery. Respondent produced

118

Id.

Furlong-Newberry v. Exotic Metals Forming Co., LCC, ALJ No. 2019-TSC-00001,

slip op. at 2 (ALJ Feb. 14, 2020) (Order Modifying Protective Order and Minutes of

Conference Call).

119

120

Id. at n.1.

2015 WL 12912366 at *2 (C.D. Cal. Nov. 17, 2015) (The district court upheld the

magistrate judge’s discovery order which directed the parties, who were working together in

pursuit of a protective order, “to enter into an ‘end-user agreement’ whereby Plaintiffs’

counsel would sign an agreement acknowledging that certain documents are subject to

ITAR and that Plaintiffs’ counsel would be responsible for adhering to ITAR when

disseminating the technical information to any third parties, namely, non-testifying expert

consultants.”).

121

Furlong-Newberry v. Exotic Metals Forming Co., LCC, ALJ No. 2019-TSC-00001,

slip op. at 1-2 (ALJ Feb. 12, 2020) (Protective Order). Because the ALJ determined that no

classified material, “defense articles” or “defense services” were implicated in the matter,

these categories of protected information were not addressed in the Protective Order. Id.

122

56 new pages of unredacted documents marked as Confidential Material, within a

larger production containing hundreds of documents.123

Complainant then requested a modification to the Protective Order to allow

for electronic transmission of confidential material, which the Protective Order

barred. Complainant also moved for a hearing continuance and requested sanctions

for late discovery production. On February 14, 2020, the ALJ issued an Order

Modifying Protective Order allowing electronic transmission of the newly produced

documents and denying Complainant’s motion for a continuance. The ALJ also

ordered Respondent to produce an index of the newly produced documents, noting

the discovery request to which they are responsive. The ALJ found that allowing

electronic transmission and requiring an index of the 56 new pages ameliorated any

prejudice from the production occurring less than a week prior to the formal

hearing.

A hearing was held in the matter from February 19 to 21 and February 2425, 2020. During the hearing, the ALJ admitted the following seven exhibits

designated as confidential and sealed under the Protective Order pursuant to ITAR:

PX 122b, 180b, 184b, 201a, 201b, 201c, and 206d.124

On December 6, 2021, the ALJ issued the D. & O. and the Order Sealing

D. & O. In the D. & O., the ALJ reviewed the record and explained the basis for his

conclusion that Complainant failed to show by a preponderance of the evidence that

any protected activity under the TSCA was a motivating factor in the termination of

her employment. In the Order Sealing D. & O., the ALJ noted that the full D. & O.

contained and relied on “technical data” protected under ITAR, though the ALJ did

not specify what “technical data” was included.125

Three of the seven exhibits designated as confidential are never cited in the

D. & O. The remaining four protected exhibits are cited between three and eight

times. In total, there are 19 instances on which a protected exhibit citation appears

in the 53-page, 31,006-word D. & O. Nevertheless, in the Order Sealing D. & O., the

ALJ found that “[a]ttempting to adequately redact the full Decision and Order runs

an unacceptable risk of an unauthorized disclosure” of technical data protected

under ITAR.126 As such, even the members of the Board were required to execute an

123

Order Modifying Protective Order and Minutes of Conference Call at 1-2.

124

D. & O. at 3.

Furlong-Newberry v. Exotic Metals Forming Co., LCC, ALJ No. 2019-TSC-00001,

slip op. at 1-2 (ALJ Dec. 6, 2021) (Order Closing Case and Sealing Decision and Order); see

22 C.F.R. § 120.10(a).

125

126

Order Sealing D. & O. at 2.

End-User Agreement in order to review the D. & O. and access the record below

upon which the D. & O. is based.127

Complainant timely appealed the ALJ’s identified decisions to the Board.

JURISDICTION AND STANDARD OF REVIEW

The Secretary of Labor has delegated to the ARB authority to review ALJ

decisions and issue agency decisions in cases arising under the Environmental Acts,

including the TSCA.128 The ARB reviews questions of law presented on appeal de

novo, but is bound by the ALJ’s factual determinations as long as they are

supported by substantial evidence.129 Substantial evidence is “such relevant

evidence as a reasonable mind might accept as adequate to support a conclusion.”130

The Board reviews an ALJ’s procedural rulings under an abuse of discretion

standard.131

DISCUSSION

Complainant raises the following issues on appeal: (1) whether the ALJ

applied the correct legal causation standard in environmental whistleblower cases;

(2) whether the ALJ’s finding that Complainant did not establish by a

preponderance of the evidence that her protected activity was a motivating factor in

her termination was supported by substantial evidence; (3) whether the ALJ abused

his discretion in his determinations on procedural issues; and (4) whether the ALJ

abused his discretion by sealing the D. & O. We discuss each issue below.

Upon any appeal of this matter following further proceedings required by this

Decision and Order, the Board will, if appropriate, address the legal authority relied upon

by the ALJ in requiring the Board’s assigned judges and staff to execute an End-User

Agreement in order to access the sealed D. & O.

127

Secretary’s Order No. 01-2020 (Delegation of Authority and Assignment of

Responsibility to the Administrative Review Board), 85 Fed. Reg. 13,186 (Mar. 6, 2020); 29

C.F.R. § 24.110. The Environmental Acts include the TSCA, the Safe Drinking Water Act,

42 U.S.C. § 300j-9(i), the Federal Water Pollution Control Act, 33 U.S.C. § 1367, the Solid

Waste Disposal Act, 42 U.S.C. § 6971, the Clean Air Act, 42 U.S.C. § 7622, and the

Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42

U.S.C. § 9610.

128

29 C.F.R. § 24.110(b); Evans v. U.S. Env’t Prot. Agency, ARB No. 2017-0008, ALJ No.

2008-CAA-00003, slip op. at 8 (ARB Mar. 17, 2020) (citing Kaufman v. U.S. Env’t Prot.

Agency, ARB No. 2010-0018, ALJ No. 2002-CAA-00022, slip op. at 2 (ARB Nov. 30, 2011)).

129

130

Consol. Edison Co. of N.Y. v. N.L.R.B., 305 U.S. 197, 229 (1938) (citations omitted).

Vander Boegh v. EnergySolutions, Inc., ARB No. 2015-0062, ALJ No. 2006-ERA00026, slip op. at 7 (ARB Feb. 24, 2017) (citation omitted).

131

1. The ALJ Applied the Correct Causation Standard

Complainant argues that the ALJ made a legal error by applying an incorrect

theory of causation.132 Initially, Complainant contends that under 22 C.F.R. §

24.109(b)(2) a whistleblower may show causation under a “mixed-motive” analysis,

with the determination to be made being whether any factor, alone or in connection

with other factors, tends to affect the outcome of the decision.133 Complainant

argues that once a whistleblower demonstrates the presence of an improper motive

in a mixed-motive case, the prima facie case of causation has been established.134 In

her Reply Brief, Complainant modifies her argument by conceding the applicability

of the standard of “motivating factor,” but continues to insist that the evidence she

presented regarding the paint availability issue135 sufficiently demonstrated the

presence of an improper motive and, therefore, she met her burden in establishing a

prima facie case of causation.136

In whistleblower cases under the Environmental Acts, including the TSCA, a

complainant must prove by a preponderance of the evidence that she (1) engaged in

protected activity, (2) suffered an adverse action, and (3) can show that the

protected activity was a motivating factor in the adverse action.137 A complainant

need only show that the protected activity was a motivating factor, not the

motivating factor.138 “A complainant must prove more when showing that protected

activity was a ‘motivating’ factor than when showing that such activity was a

‘contributing’ factor.”139 This approach is consistent with courts’ use of the

motivating factor standard in cases arising under analogous Environmental Acts.140

132

Complainant’s Opening Brief at 37.

133

Id.

134

Id.

Complainant frames her entire motivating factor argument around her protected

activity involving the paint availability issue. She does not argue before the Board that her

May 2018 reports of unlabeled material and barrel-sealing issues motivated Respondent’s

termination of her employment in any manner.

135

136

Id. at 41.

137

29 C.F.R. § 24.109(b)(2).

138

Id. (emphasis added).

See Lopez v. Serbaco, Inc., ARB No. 2004-0158, ALJ No. 2004-CAA-00005, slip op. at

4-5 n.6 (ARB Nov. 29, 2006).

139

See 29 C.F.R. § 24.109(b)(2) (applying the standard of “motivating factor” to the

whistleblower protection provisions of the Safe Water Drinking Act (42 U.S.C. § 300j-9(i)),

the Federal Water Pollution Control Act (33 U.S.C. § 1367), the Solid Waste Disposal Act

(42 U.S.C. § 6971), the Clean Air Act (42 U.S.C. § 7622), and the Comprehensive

Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. § 9610)).

140

If a complainant meets her burden of proof, a respondent may nevertheless avoid

liability if it proves by a preponderance of the evidence that it would have taken the

same adverse action in the absence of the complainant’s protected activity.141

The ALJ correctly applied this legal standard, noting that “Complainant

must show by a preponderance of the evidence that her protected activity was a

motivating factor in Respondent’s adverse action.”142 After considering the

proximity in time between Complainant’s protected activities and her termination,

the structure of Respondent’s investigation, and other evidence of alleged animus,

the ALJ found “Complainant ha[d] the burden to prove that her protected activity

was a motivating factor in her termination by a preponderance of the evidence” but

had not done so.143 For the reasons discussed below, we hold that the ALJ properly

applied the correct legal standard in this case.

2. Complainant Failed to Establish Her Protected Activity Was a

Motivating Factor in her Termination

The ALJ determined that Complainant had met her burden to establish two

of the required three elements of her TSCA retaliation claim. The ALJ found that

Complainant engaged in activity protected under the TSCA when she reported the

unlabeled paint and the unsealed barrel issues in May of 2018 and when she

reported her concerns about the unavailability of the IPP project paint on

September 7, 2018.144 The ALJ also found that Complainant suffered an adverse

action when her employment was terminated.145 Complainant failed to present any

arguments on appeal connecting the termination of her employment to her

reporting of the labeling issue or the barrel-sealing issue in May of 2018, and

thereby waived any reliance on those findings as a basis for reversing the ALJ’s

ultimate causation determination.146 As such, our decision ultimately turns on

whether Complainant met her burden to establish that her reporting of the IPP

paint availability issue was a motivating factor in her termination.

Complainant only has to prove that her protected activity was a motivating

factor in the adverse action, even if other legitimate factors also motivated the

141

29 C.F.R. § 24.109(b)(2).

142

D. & O. at 42 (emphasis in original).

143

Id. at 53.

144

Id. at 39.

145

Id. at 41.

Clemmons v. Ameristar Airways, Inc., ARB No. 2008-0067, ALJ No. 2004-AIR-00011,

slip op. at 12 (ARB May 26, 2010) (citing Walker v. American Airlines, Inc., ARB No. 20050028, ALJ No. 2003-AIR-00017, slip op. at 9 (ARB Mar. 30, 2007) (argument not raised on

appeal is waived)); 29 C.F.R. § 24.110(a).

146

adverse action.147 A motivating factor is not established merely by evidence that

protected activity occurred and that an employee suffered adverse action.

Establishing that protected activity was a “motivating factor” requires proof, by a

preponderance of the evidence, that some nexus existed between the activity and

the adverse action.148 That nexus is missing if the protected activity takes place

after or is otherwise unconnected to the adverse action.149

Complainant contends that the ALJ erred in finding she did not establish

that her reporting of the paint availability issue was a motivating factor in her

termination.150 Having reviewed the evidentiary record as a whole, the Board

concludes that substantial evidence supports the ALJ’s findings, as addressed

below.

It is undisputed that Complainant engaged in protected activity at or about

the same time Respondent investigated her breach of confidentiality, and during

the time Respondent made the decision to terminate her employment. Complainant

relies almost exclusively on the temporal proximity between her protected activity

and her termination to establish her claim’s “motivating factor” element. Temporal

proximity alone is not necessarily sufficient. Although an inference of

discrimination may arise when an adverse action closely follows a protected

activity, an intervening event diminishes the inference.151 Here, the ALJ gave due

consideration to the proximity in time between Complainant’s protected activity and

her termination, but also took account of the intervening events surrounding

Complainant’s breach of confidentiality and her lack of truthfulness in advising the

management team about her actions. Although the intervening nature of these facts

may be less evident when described textually, when laid out in temporal order they

reveal substantial support for the ALJ’s conclusion that the only motivating factor

for Respondent’s decision to terminate Complainant’s employment was her breach

of confidentiality and associated dishonesty, discovered on September 6, 2018, and

147

See Lopez, ARB No. 2004-0158, slip op. at 6-8.

Beaumont v. Sam’s East, Inc., ARB No. 2015-0025, ALJ No. 2014-SWD-00001, slip

op. at 4 (ARB Jan. 12, 2017) (citing 29 C.F.R. § 24.109(b)(2) and Jenkins v. U.S. Env’t. Prot.

Agency, ARB No. 1998-0146, ALJ No. 1988-SWD-00002, slip op. at 17-18 (ARB Feb. 28,

2003)); see also Higgins v. Alyeska Pipeline Serv. Corp., ARB No. 2001-0022, ALJ No. 1999TSC-00005, slip op. at 5 (ARB June 27, 2003).

148

See Kesterson v. Y-12 Nuclear Weapons Plant, ARB No. 1996-0173, ALJ No. 1995CAA-00012, slip op. at 5 (ARB Apr. 8, 1997).

149

150

Complainant’s Opening Brief at 37, 41-42, 46.

See Acosta v. Union Pac. R.R. Co., ARB No. 2018-0020, ALJ No. 2016-FRS-00082,

slip op. at 6-13 (ARB Jan. 22, 2020) (Decision and Order of Remand) (analyzing temporal

proximity, inference of retaliation, intervening events, and proof by a preponderance of the

evidence).

151

The ALJ found credible Respondent’s witnesses’ testimony that the paint

availability issue was not considered during, and therefore played no role in, the

decision-making leading to Complainant’s termination of employment. The Board

defers to those credibility decisions,153 finding them to be consistent with the

objective facts also found by the ALJ, including that:

•

Through its Kent IPP team, Respondent was already aware of the

paint availability issue prior to Complainant’s learning of and

reporting it.154

It was not in Respondent’s self-interest to cover up or avoid the issue

given Respondent’s ongoing contractual relationship which required

Respondent to provide the ducts as specified and approved.155

Respondent had already identified the issue to their contract partner,

making it implausible that avoidance of sharing that information

motivated Respondent’s actions.156

The paint was not in fact unavailable and caused no problems for the

timely completion of the IPP project transfer.157

Based on these facts, the ALJ rejected Complainant’s unevidenced contention

that her termination was decided to avoid negative ramifications of the paint

availability issue in an upcoming DCMA audit at Respondent’s facilities.

Considering the substantial evidence of these facts as set forth in the record, the

ALJ found “Complainant ha[d] the burden to prove that her protected activity was a

motivating factor in her termination by a preponderance of the evidence” but failed

to meet that burden.158 We affirm that determination.159

The ARB generally defers to an ALJ’s credibility determinations unless they are

“‘inherently incredible or patently unreasonable.’” Kanj v. Viejas Band of Kumeyaay

Indians, ARB No. 2012-0002, ALJ No. 2006-WPC-00001, slip op. at 6 (ARB Aug. 29, 2012)

(quoting Caldwell v. EG&G Def. Materials, Inc., ARB No. 2005-0101, ALJ No. 2003-SDW00001, slip op. at 12 (ARB Oct. 31, 2008) (quotation omitted).

153

154

D. & O. at 46.

155

Id.

156

Id. at 46-47

157

Id. at 47.

158

D. & O. at 53.

Because Complainant did not meet her burden to establish that her protected

activity was a motivating factor for her termination, the ALJ was not required to reach the

issue of Respondent’s affirmative defense “that it would have taken the same adverse action

in the absence of the protected activity.” 29 C.F.R. § 24.109(b)(2). Noting that it was

unnecessary to reach the issue, the ALJ nevertheless addressed the issue and concluded

that he would have found that Respondent had established by a preponderance of the

159

3. The ALJ Did Not Abuse his Discretion in Evidentiary Rulings

The ARB reviews an ALJ’s determinations on procedural and evidentiary

rulings under an abuse of discretion standard.160 “ALJs have wide discretion to set

or limit the scope of discovery and will be reversed only when such evidentiary

and discovery rulings are arbitrary or an abuse of discretion.”161 To meet this

standard, at a minimum Complainant is required to identify “‘with some precision’”

the information she should have received and how that information would have

altered the evidence submitted at hearing.162 “Mere speculation” is insufficient.163

Complainant argues that the ALJ abused his discretion in denying her

request during the formal hearing for the production of additional documents.

Specifically, Complainant argues that the ALJ’s ruling denied her due process

because she did not have access to materials under the ALJ’s February 12

Protective Order until a week before the formal hearing commenced. She asserts

that this untimely production prevented her from investigating, developing,

organizing, or requesting more documents from Respondent relating to what had

just been revealed to her in the February 12 materials.164

Importantly, Complainant does not address the fact that she failed to bring a

motion to compel production during the discovery period but instead waited until

during the hearing to request such relief. The fact that the parties had been

negotiating regarding the issuance of a protective order at length after the close of

discovery is not a sufficient reason to find error in the ALJ’s ruling. Complainant

had an obligation to diligently seek the discovery she needed, and her failure to

earlier seek to compel production rebounds to her peril.

evidence that it would have terminated Complainant’s employment due to her breach of

confidentiality and lack of honesty, even if she had never engaged in protected conduct. See

D. & O., at 53 n.82. The Board concludes that substantial evidence supports the ALJ’s

determination that Respondent would have decided to terminate Complainant for her

confidentiality breach and her lack of truthfulness about the breach even if no protected

activity had taken place. The Board affirms that determination.

James v. Suburban Disposal, Inc., ARB No. 2010-0037, ALJ No. 2009-STA-00071,

slip op. at 4 (ARB Mar. 12, 2010).

160

Nieman v. Se. Grocers, LLC, ARB No. 2018-0058, ALJ No. 2018-LCA-00021, slip op.

at 21 (ARB Oct. 5, 2020).

161

See Bucalo v. United Parcel Serv., Inc., ARB No. 2010-0107, ALJ Nos. 2008-SOX00053, 2008-STA-00059, slip op. at 4 (ARB Mar. 21, 2012) (quoting Moore v. U.S. Dep’t of

Energy, ARB No. 1999-0047, ALJ No. 1998-CAA-00016, slip op. at 4 (ARB June 25, 2001)).

162

163

Nieman, ARB No. 2018-0058, slip op. at 21.

164

Complainant’s Opening Brief at 58-61.

Complainant has not established that the ALJ abused his discretion in

denying her motion to compel further production of documents during the hearing.

Thus, the Board finds no abuse of discretion in the ALJ’s rulings issued during the

hearing.

Even if Complainant had sought to compel production in a more diligent and

timely manner, it is not apparent that the result would have been different. The

only specific information that Complainant identifies as unprovided and necessary

to her case is the actual name of the IPP project paint. Given the ALJ’s

determination that Complainant’s reporting related to the paint issue was protected

activity but not a motivating factor for Respondent’s termination decision, and the

Board’s current affirmance of those determinations, it is difficult to envision that

the production of the paint’s formal name would have had any impact on the result

in this case. Complainant’s insistence to the contrary is the “mere speculation”

which is insufficient to establish an abuse of discretion by the ALJ.

Complainant also assigns as error the ALJ’s credibility determinations

related to “Respondent’s executives,” presumably including Gines, Antin, Schatz,

McMaster, Cvitanich, and Schoenwald. Because an ALJ observes all witnesses

throughout a hearing, the Board will uphold an ALJ’s credibility determinations

unless they are “inherently incredible or patently unreasonable.”165 If a “‘decision is

based on testimony that is coherent and plausible, not internally inconsistent, and

not contradicted by external evidence,’” the Board will defer to an ALJ’s credibility

determinations.166

In this case, the ALJ issued a thorough and well-reasoned D. & O. in which

he made and relied upon specific credibility determinations for each witness,

including Complainant and Respondent’s executives. We find these determinations

to be consistent with the record and well within the ALJ’s discretion to make. As

such, Complainant has failed to establish any abuse of discretion.

Mizusawa v. United Parcel Serv., ARB No. 2011-0009, ALJ No. 2010-AIR-00011, slip

op. at 3 (ARB June 15, 2012) (quoting Jeter v. Avior Tech. Ops., Inc., ARB No. 2006-0035,

ALJ No. 2004-AIR-00030, slip op. at 13 (ARB Feb. 29, 2008)); see also Negron v. Vieques Air

Link, Inc., ARB No. 2004-0021, ALJ No. 2003-AIR-00010, slip op. at 5 (ARB Dec. 30, 2004).

165

Jenkins v. U.S. Env’t Prot. Agency, ARB No. 2015-0046, ALJ No. 2011-CAA-00003,

slip op. at 39 (ARB Mar. 1, 2018) (quoting Bobreski v. J. Givoo Consultants, ARB No. 20130001, ALJ No. 2008-ERA-00003, slip op. at 26 (ARB Aug. 29, 2014)).

166

4. The ALJ Abused His Discretion in Sealing the Entire D. &. O. and

Issuing the Protective Order Without Sufficient Factual Record

In the Order Sealing D. & O., the ALJ sealed the D. & O. from public access,

noting that it “contains and relies on ‘technical data’ within the meaning of ITAR

and that “[a]ttempting to adequately redact the full (D. & O.) runs an unacceptable

risk of an unauthorized disclosure.”167 Relying on ITAR, the ALJ had issued the

Protective Order a week before the hearing commenced. For the reasons discussed

below, we remand to the ALJ for further proceedings.

A. ITAR

The Arms Export Control Act (AECA)168 “regulates the export and import (i.e.

disclosure or transfer) of “defense articles” and “defense services” (and any

“technical data” thereto) out of and into the United States.”169 The purpose of the

AECA is to “restrict the international market in defense articles by closely

controlling the flow of such articles out of this country.”170

ITAR, the implementing regulations for AECA, defines the United States

Munitions List (USML),171 made up of 21 categories of identified defense articles

and defense services which, with related “technical data,” require compliance with

specified licensing controls absent an authorized exception.172 ITAR specifically

defines “technical data” with respect to each of the 21 USML categories relying

upon the baseline definition of the term, as follows:

Information, other than software as defined in § 120.40(g),

which is required for the design, development, production,

manufacture, assembly, operation, repair, testing,

maintenance or modification of defense articles. This

includes information in the form of blueprints, drawing,

photographs, plans, instructions or documentation.[173]

167

Order Sealing D. & O. at 1.

168

22 U.S.C. § 2778; 22 C.F.R. §§ 120.6, 120.9(a)(2).

169

Burt, 2015 WL 12912366, at *2-3.

170

Kuhali v. Reno, 266 F.3d 93, 109 (2d Cir. 2001).

171

22 C.F.R. Part 121.

172

22 C.F.R. §§ 121.1; 123-125.

22 C.F.R. § 120.33(a)(1); see 22 U.S.C. § 2778(a)(1) (“The items so designated shall

constitute the United States Munitions List.”); 22 C.F.R. § 120.10(a) (“The articles . . . and

related technical data designated as defense articles . . . constitute the U.S. Munitions

List.”).

173

ITAR provides that any party that is appropriately licensed “is responsible for the

acts of employees, agents, brokers, and all authorized persons to whom possession

of the defense article, which includes technical data, has been entrusted regarding

the operation, use, possession, transportation, and handling of such defense article

abroad.”174 Being “responsible” under ITAR does not equate to being liable for

another party’s unauthorized disclosure in violation of the statute.175 ITAR requires

that a discloser maintain a list of persons to whom disclosure is made and that

those persons be United States citizens or of other identified status.176 For purposes

of the current matter, the Board concludes that Respondent is responsible for

complying with the terms of ITAR, which in turn makes it responsible for the

handling of any technical data entrusted to Complainant.177

Even so, the mere invocation of ITAR does not cloak all of Respondent’s

actions in secrecy. “[T]he purpose of ITAR is to further ‘world peace and security,’

not to permit parties to avoid their discovery duties.”178 Neither is the purpose of

ITAR to shield from the public’s view information that does not constitute protected

“technical data” or is already in the public domain.179 The ALJ relied on ITAR as

the basis for issuing both the Protective Order and the Order Sealing D. & O. Given

the overlap and interplay between the Protective Order and the ALJ’s Order

Sealing D. & O., the Board finds it necessary to address each separately in order to

clarify the factual record and legal authorities in this case.

174

Id. at § 127.1(c).

175

Burt, 2015 WL 12912366, at *3.

176

22 C.F.R. § 120.15.

While Respondent may be “responsible” for any unauthorized disclosure, that does

not equate to Respondent being “liable” for any of Complainant’s actions in violation of

ITAR. See Burt, 2015 WL 12912366, at *3.

177

178

Id. at *4.

See 22 C.F.R. § 120.33(b) (explaining that technical data “does not include

information concerning information . . . in the public domain” as defined in 22 C.F.R. §

120.34).

179

B. Order to Seal D. & O.

Unlike the standard required for issuance of a protective order, the law

requires much more to support the sealing of judicial records from public view. A

court must identify “compelling reasons supported by specific factual findings” in

order to outweigh the strong public policies favoring disclosure.180 “A party seeking

to seal judicial records must specify facts that causally connect the documents at

hand to sufficiently compelling reasons that justify overriding the strong

presumption favoring public access.”181 “The trial court must weigh relevant factors

including the “public interest in understanding the judicial process and whether

disclosure of the material could result in improper use of the material for

scandalous or libelous purposes or infringement upon trade secrets.”182 The fact that

a protective order has issued does not present sufficient compelling reasons to seal

the record.183

In the present case, the ALJ issued an Order Sealing D. & O. without

identifying or applying the compelling reasons standard. In the entirety of its

relevant parts, the Order Sealing D. & O. reads as follows:

The full Decision and Order contains and relies on

“technical data” within the meaning of 22 C.F.R. Part 120

of the International Traffic in Arms Regulations (ITAR).

The ITAR implement the Arms Export Control Act (AECA),

which contains disclosure-limiting provisions that are a

recognized exception to the Freedom of Information Act.

Council for a Livable World Educ. Fund v. U.S. Dep’t of

State, No. CV 96-1807 (HHK), 1998 WL 36034416, at *3-4

(D.D.C. Jan. 21, 1998) (discussing FOIA Exemption 3).

The technical data in this case was subjected to

special handling under a protective order I issued on

February 12, 2020 to limit its disclosure. See generally 22

Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 678 (9th Cir.2010) (quoting Kamakana

v. City & County of Honolulu, 447 F.3d 1172, 1178-79 (9th Cir. 2006)).

180

181

Tokarski v. Med-Data, Inc., 2022 WL 683250, at *1-2 (W.D. Wash. Mar. 8, 2022).

Pintos, 605 F.3d at 679 n.6 (quoting Hagestad v. Tragesser, 49 F.3d 1430, 1434 (9th

Cir. 1995)).

182

See Chaney v. Auto Trackers & Recovery N., LLC, 2021 WL 6137298, at *1-2 (E.D.

Wash. Mar. 25, 2021) (“[T]he existence of a private Protective Order is not a compelling

reason to seal a document in the Court Record.”); Ponomarenko v. Shapiro, 2017 WL

3605226, at *3 (N.D. Cal. Aug. 21, 2017) (Where, as here, a protective order has been

entered, “an agreement among the parties to keep a document confidential does not

establish a compelling reason to seal.”)

183

C.F.R. Part 127; see also 22 C.F.R. § 125.2(c) (prohibiting

unlicensed transfer of unclassified technical data to a

“foreign person”). Attempting to adequately redact the full

Decision and Order runs an unacceptable risk of an

unauthorized disclosure. I therefore find that sealing the

full Decision and Order is the only adequate means to

protect the interest in non-disclosure and outweighs the

presumption of public access to the full Decision and Order.

See 29 C.F.R. § 18.85. I note that the public’s interest is at

least in part satisfied by disclosure of the ultimate result

in this case, as set out above.[184]

In effect, the ALJ’s only basis for issuing the Order Sealing D. & O. is the fact that

the Protective Order had been issued earlier based on ITAR-related concerns. That,

in and of itself, is not sufficient under the law.

Instead, like every other application of statutory authority, ITAR requires the

consideration of the components of the statute in light of the specific information at

issue in order to determine whether and where the bar to public transparency

should be set. ITAR’s multi-pronged test is best described in West v. Bell Helicopter

Textron, Inc.,185 which examined an attempt to seal trial exhibits on the basis that

the helicopter at issue in that product liability case contained technology restricted

from export under ITAR.

[ITAR] prevents the disclosure of only that technical data

which both ‘disclose[s] critical technology with military

and space application’ and appears on the Munitions List,

and the relevant provisions of the List cover only that data

which itself both ‘directly related to the manufacture and

production’ of certain ‘specifically designed’ components of

the [helicopter] and ‘required for the design, development,

production, manufacture, assembly, operation, repair,

testing, maintenance, or modification’ of those articles.

Thus…, obtaining relief from the disclosure of

documents based on ITAR requires them to explain “how

each document (1) discloses critical technology with

military or space application, (2) directly relates to the

manufacture of specifically designed components of the

[helicopter], and (3) is required for the design,

development,

production,

manufacture,

assembly,

184

Order Sealing D. & O. at 1-2.

185

2014 WL 12908077 (D.N.H. Sept. 30, 2014).

operation, repair, testing, maintenance, or modification of

those components, all of which is necessary to bring a

document within the scope of [ITAR].[186]

The West court found that it was insufficient to conclude that, because one engine

model subjected to testing described in a specific exhibit was installed in a military

aircraft covered by ITAR, “[a]ny technical data related to the design, development,

production, manufacture, assembly, operation, repair [sic] of the Kiowa, its engine,

and its ECU is restricted under ITAR.”187 The court found that “[t]his assertion does

not match up to the requirements of ITAR, i.e., that the data “directly relate[ ] to

the manufacture of specifically designed components” of critical military technology

(rather than simply “relate” to components “installed in” military technology), nor

that the data be “required” for “the design, development, production, manufacture,

assembly, operation, repair, maintenance, or modification” of those articles (rather

than simply “related to” those tasks).188

As in West, nothing in the record before the Board establishes that the ALJ

applied the required legal standard for sealing the entire D. & O. Neither does the

factual record support the ALJ’s action. It is apparent that many of the facts set

forth in the D. & O., even many of the facts referenced in the seven specifically

identified exhibits designated as confidential, are not technical data. For example,

the fact that Complainant sent an email to a co-worker and copied her supervisor on

a specific date, absent discussion of the content, in no way “discloses critical

technology with military or space application, (2) directly relates to the

manufacture of specifically designed components of the [product at issue], and (3) is

required for the design, development, production, manufacture, assembly,

operation, repair, testing, maintenance, or modification of those components,” all of

which is necessary to bring a document within the scope of [ITAR].189 Although the

content of the email may, or may not, meet the ITAR test, that determination was

never specified by the ALJ, nor was it impossible to redact whatever information

the ALJ may have determined did meet the statutory definition in this instance.

In addition, a vast majority of the facts stated in the D. & O. were already

within the public domain at the time this case was commenced, and thus are

186

Id. at *4-5 (internal citations omitted; bolding added; other emphasis in original).

187

Id. at 5.

188

Id.

189

Id.

specifically excluded from the scope of both ITAR190 and the Protective Order191

including the following:

•

Names of the parties, including the Respondent’s current name

Fact that Respondent manufactures “high-temperature, high-pressure

air and exhaust management solutions for aircraft and engines,” and

can “engineer, manufacture, and provide aftermarket support on vital

systems and components for virtually every commercial airliner and

military aircraft in active service today,” which is noted on its website

at https://www.exoticmetals.com/about-us

Names of relevant employees

Supervisory relationship(s) between employees

Employment responsibilities of various supervisors and coworkers,

including reference to “IPP Project” available on LinkedIn

Fact that Respondent produces certain generically described products,

see https://www.parker.com/us/en/search?searchbox=duct and

https://www.exoticmetals.com/catalog/our-products.

Fact that Respondent uses “paint” and “coatings” in various

manufacturing processes, see https://ph.parker.com/us/en/emishielding-paints

Complainant’s allegations that she reported to Respondent’s decisionmakers that a necessary paint might be unavailable for a specific

project to which she had been assigned, an allegation made in her

complaint to OSHA in October 2018, well before the issuance of the

Protective Order in February 2020 and referenced throughout the

proceedings below well before any ITAR-related concerns were

advanced by Respondent

Even so, the ALJ determined, without any identified and thus reviewable

basis in the record, that “attempting to adequately redact the full Decision and

Order runs an unacceptable risk of an unauthorized disclosure [of technical

data.]”192 We have exhaustively combed the entire record, including but not limited

to the seven specifically identified and protected exhibits, and been unable to

identify sufficient “technical data” that supports the suppression of the entire

D. & O. Although there may, or may not, be technical data included in the

descriptions of and references to projects, processes or substances addressed in the

See 22 C.F.R. § 120.33(b) (explaining that technical data “does not include

information concerning information . . . in the public domain” as defined in 22 C.F.R. §

120.34).

190

Protective Order at 2 (“However, the protections conferred by this agreement do not

cover information that is in the public domain or becomes part of the public domain through

trial or otherwise.”).

191

192

D. & O. at 2.

seven specific exhibits marked as Confidential Material within the D. & O., it is

unreasonable to conclude that those few references could not have been redacted

and/or otherwise anonymized. As other courts have found, while “portions of the

documents [may] contain ITAR and EAR controlled information, that fact is not a

compelling reason to seal the documents in their entirety.”193

If the protected technical data resides in the seven specified exhibits or in

other documents used as exhibits at hearing or in depositions, the law may support

a determination that those specific exhibits should be sealed while the D. & O.

should not. At this point in the proceeding, the Board is unable to examine that

issue due to the ALJ’s failure to identify—even by high-level category—what

“technical data” supports the imposition of ITAR-related protections in this matter.

The ALJ made no findings of a compelling reason to seal and left no record of

having engaged in such examination—neither of the seven specifically cited exhibits

marked as Confidential Material during the hearing nor of the entire 53-page D. &

O. Without such, the Board is left with no factual basis upon which to uphold the

ALJ’s determination, and thus finds such to be an abuse of discretion.194 As such,

the Board remands this matter to the ALJ with the direction to make specific

findings of sufficiently compelling reasons to maintain a seal over limited

components of entire documents in the record and as cited in the resulting D. & O.

after conscientiously balancing the competing interests of the public in having

access to judicial records. 195

C. Protective Order

An ALJ has authority to grant a protective order “to protect against undue

disclosure of privileged communications, or sensitive or classified matters.”196 To

appropriately do so, the ALJ must determine “whether ‘good cause’ exists to protect

th[e] information from being disclosed to the public by balancing the needs for

discovery against the need for confidentiality.’”197 We review de novo whether the

193

TSI Inc. v. Azbil BioVigilant Inc., 2014 WL 880408, at *3 (D. Ariz. Mar. 6, 2014).

See United States v. Doe, 662 F. App’x 515, 516 (9th Cir. 2016) (court’s failure to

identify and apply correct legal standard provides sufficient grounds to find abuse of

discretion).

194

See Comphy Co. v. Amazon.com, Inc., 371 F. Supp. 3d 914, 929-30 (W.D. Wash. 2019)

(noting that failure to provide necessary specification “leaves the Court with no factual

basis for maintaining [] allegedly confidential material under seal.”).

195

196

29 C.F.R. § 18.85(a).

Pintos, 605 F.3d at 678 (quoting Phillips ex rel. Estates of Byrd v. Gen. Motors

Corp., 307 F.3d 1206, 1213 (9th Cir. 2002)).

197

ALJ used the correct legal standard when granting the Protective Order, and we

review the application of that correct legal standard for abuse of discretion.198

In this case, the ALJ specifically found that “the restrictions on export of

technical data established by ITAR . . . and recordkeeping obligations attendant to

those restrictions, provide good cause for granting a protective order.”199 Although

Complainant challenges that finding in this appeal, we find that the ALJ cited to

the correct standard in issuing the Protective Order in the case. We affirm this

aspect of the ALJ’s action.

The critical issue is whether the ALJ correctly applied the good cause

standard. The law is clear that “[a] party asserting good cause bears the burden, for

each particular document it seeks to protect, of showing that specific prejudice or

harm will result if no protective order is granted.”200 For the same reasons as set

forth above regarding the lack of a record upon which the ALJ’s determination of

ITAR-related protections was based with respect to the Order to Seal D. & O., we

find that the ALJ abused his discretion in failing to make an adequate record with

regard to his application of the good cause standard. Accordingly, we remand the

Complainant’s challenges to the Protective Order and the two identified related

orders to the ALJ for further action. We note that the Protective Order itself

contains provisions defining procedures for challenging confidentiality designations,

and to the extent that those provisions restrict the right to challenge to the

Respondent alone,201 for reasons of comity and fairness to the parties we direct the

ALJ to accept and act upon motions brought by either party. To be clear, we direct

the ALJ to apply the good cause standard, not the compelling reasons standard, to

the necessary analysis relevant to the Protective Order and related orders. We do

not now vacate the Protective Order but instead hold it in full force and effect until

the completion of the directed further analysis by the ALJ. Our decision reflects an

Petitt, v. Delta Air Lines, Inc., ARB No. 2019-0087, ALJ No. 2018-AIR-00041, slip op.

at 2 (ARB Aug. 26, 2020); see also In re Midland Nat. Life Ins. Co. Annuity Sales Pracs.

Litig., 686 F.3d 1115, 1119 (9th Cir. 2012) (citing Phillips ex rel. Estates of Byrd, 307 F.3d

at 1210).

198

Furlong-Newberry v. Exotic Metals Forming Co., LLC, ALJ No. 2019-TSC-00001, slip

op. at 2 (ALJ Feb. 10, 2020) (Order Granting in Part and Denying in Part Motion for

Protective Order).

199

200

Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1130-31 (9th Cir. 2003).

The Protective Order limits judicial intervention to situations where “the

designating party may file and serve a motion to retain Confidentiality.” In this case,

Respondent was the party that designated the material as confidential, and thus by the

terms of the Protective Order Respondent is the only party authorized to file a relevant

motion. See Protective Order at 4 (“If the parties cannot resolve a challenge without the

presiding judge’s intervention, the designating party may file and serve a motion to retain

Confidentiality.”).

201

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.